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Middle Corridor

Kazakhstan to Enhance Middle Corridor Rail Connectivity with World Bank Support

The Board of Executive Directors of the World Bank has approved an $846 million guarantee from the International Bank for Reconstruction and Development (IBRD) to mobilize $1.41 billion in long-term private financing for a major railway project along Kazakhstan’s section of the Trans-Caspian International Transport Route (TITR), also known as the Middle Corridor. The project is further backed by a $564 million co-guarantee from the Asian Infrastructure Investment Bank (AIIB). The initiative is designed to improve the efficiency and resilience of Kazakhstan’s rail network while strengthening the financial sustainability and commercial viability of Kazakhstan Temir Zholy (KTZ), the national railway operator. A central component of the project is the construction of a new 322.3-kilometer greenfield railway line between Mointy and Kyzylzhar. The link is expected to eliminate a significant detour, shorten the route by 149 kilometers, reduce congestion on heavily used sections, and enable double-stack container operations. The new line will be equipped with modern signaling and telecommunications systems and designed to allow for future expansion and electrification. According to project documentation, the upgrade is expected to contribute to tripling freight volumes and halving end-to-end transit times along the Middle Corridor by 2030. By shifting cargo from road to rail, it is also projected to reduce transport-related emissions, supporting Kazakhstan’s climate commitments and broader sustainable development objectives. Official data indicate that freight volumes transported through Kazakhstan along the TITR increased by 36% in 2025. In addition to infrastructure investment, the project includes technical assistance and institutional strengthening for KTZ. This includes support for tariff reform, exploration of alternative financing mechanisms, improvements in financial and environmental management, and preparation for a potential future initial public offering (IPO). “Beyond enabling critical infrastructure investments, this project supports important reforms that will strengthen Kazakhstan Temir Zholy’s financial sustainability and long-term competitiveness,” said Andrei Mikhnev, World Bank Country Manager for Kazakhstan and Turkmenistan. By combining phased infrastructure investments, institutional reforms, and private capital mobilization, the initiative aims to develop a modern rail system capable of delivering long-term economic and environmental benefits for Kazakhstan and the wider Eurasian region.

Rogun Hydropower Plant

Tajikistan Plans Over $1 Billion for Rogun Hydropower Project in 2026

The government of Tajikistan plans to allocate at least 10 billion TJS (more than $1 billion) to finance the Rogun hydropower project in 2026, Finance Minister Faiziddin Qahhorzoda said on February 13 at a press conference in Dushanbe. The statement was later released by the Ministry of Finance and reported by Asia-Plus. Qahhorzoda specified that 8.2 billion TJS has already been earmarked in the state budget for completion of the Rogun hydropower plant. He added that additional financing could be mobilized through development partners, as agreements have been signed and the required domestic procedures and partner conditions have been fulfilled. “Certain conditions had to be met by the government of Tajikistan to access these funds. All conditions have been completed, and financing under the first tranche of $350 million has begun,” the minister said, referring to grant funding from the World Bank. He added that negotiations for an additional $300 million from the institution have been concluded successfully, with the funds expected to become available by mid-year. The minister also stated that domestic procedures are being finalized to attract $150 million from the Islamic Development Bank, as well as $100 million each from the Saudi Fund for Development, the Kuwait Fund for Arab Economic Development, and the OPEC Fund for International Development. According to Qahhorzoda, the remaining step is the completion of tender procedures. In addition, all procedures have reportedly been completed to secure $500 million from the Asian Infrastructure Investment Bank, of which $270 million is expected to be disbursed in the first tranche. According to the Finance Ministry, approximately 11 billion TJS was allocated in 2025 for the completion of Rogun, including 2 billion TJS designated for servicing Eurobonds issued to support the project. Earlier, at the end of January, the Energy Ministry stated during a separate press conference that several financing agreements signed with international partners in 2024-2025 had already entered into force. Officials noted that activating these agreements required fulfilling a number of technical and procedural conditions. The Rogun hydropower plant, located 110 kilometers from Dushanbe on the Vakhsh River, is the largest energy project in Tajikistan. Construction began in 1976 but was suspended following the collapse of the Soviet Union. Work resumed after independence. Of the six planned generating units, each with a capacity of 600 MW, two are currently operational and had produced 9.9 billion kWh of electricity by the end of last year. In December 2025, President Emomali Rahmon announced that the third unit is scheduled to be commissioned in September 2027. Once all six units are operational, the plant’s total installed capacity will reach 3.78 GW, and its 335-meter dam is projected to become the tallest in the world. The total cost of construction has been estimated at $6.2 billion.

World Bank

World Bank Ready to Allocate Up to $1 Billion Annually for Projects in Kazakhstan

The World Bank plans to allocate up to $1 billion per year to Kazakhstan over the next six years to finance projects under a new Country Partnership Framework for 2026-2031. The announcement followed negotiations in Astana between the Kazakh government and representatives of the World Bank Group. The parameters of the forthcoming strategy were discussed at a meeting between Deputy Prime Minister and Minister of National Economy Serik Zhumangarin and representatives of the international financial institution. According to Zhumangarin, the new framework is expected to support structural reforms through financing, technical expertise, and joint initiatives. According to the meeting participants, the potential funding, up to $1 billion annually, will focus on private sector development, infrastructure, and improving economic competitiveness. The draft strategy prioritizes transport and digital connectivity, climate policy, improved water and energy services, financial market development, stimulation of private investment, and expanding the share of renewable energy. The Kazakh side stated that these priorities align with the country’s national strategic and socio-economic objectives. Analytical support for reforms will continue under the government’s joint economic research program with the World Bank. Under the previous partnership strategy for 2020-2025, 14 projects totaling $4.2 billion were implemented. Among the largest were the development of the Western Europe-Western China international transit corridor, the reconstruction of the Almaty-Khorgos highway, and the modernization of irrigation and drainage systems. Andrei Mikhnev, the World Bank’s permanent representative in Kazakhstan and Turkmenistan, said that the Western Europe-Western China corridor has improved transport accessibility for more than 5 million people. Travel time has been reduced by approximately two-thirds, average speeds have tripled, and transportation costs have declined by 35%. The project created more than 1,200 permanent jobs, and most residents in the surrounding regions reported improvements in their quality of life. Support for small and medium-sized enterprises under the previous program included grants and advisory assistance to more than 1,000 businesses. With support from the program, 175 start-ups were launched, generating approximately $41 million in sales and attracting $16 million in investment. Irrigation modernization projects improved water-use efficiency across 92,000 hectares and enhanced conditions for 94,000 water users, including around 60,000 farmers. The International Finance Corporation (IFC), part of the World Bank Group, has announced plans to continue providing advisory support for public-private partnership projects and investment initiatives in Kazakhstan. Priority areas include modernization of railway infrastructure, financing for micro and small businesses through partner banks, and projects in the agro-industrial sector, ranging from the acquisition of modern agricultural equipment to deep grain processing. The parties agreed to finalize the draft strategy, incorporating the proposals discussed, and submit it to the World Bank’s Board of Directors for consideration. The Times of Central Asia, previously reported that the IFC, together with the Asian Infrastructure Investment Bank, is participating in financing the construction of the Almaty railway bypass line.

Electricity

Central Asia Launches Regional Electricity Market with World Bank Support

On January 22, the World Bank’s Board of Executive Directors approved the 10-year Regional Electricity Market Interconnectivity and Trade (REMIT) Program, an ambitious initiative to establish Central Asia’s first regional electricity market. The program aims to boost cross-border electricity trade, expand transmission capacity, and lay the foundation for large-scale renewable energy integration across the region. Electricity demand in Central Asia is projected to triple by 2050 under a business-as-usual scenario. Yet electricity trade in the region currently accounts for only 3% of total demand. The REMIT Program seeks to harness Central Asia’s diverse and complementary energy resources: hydropower in Kyrgyzstan and Tajikistan, thermal power from coal and natural gas in Kazakhstan, Turkmenistan, and Uzbekistan, and the region’s rapidly expanding solar and wind potential. Over the next decade, REMIT aims to: Increase regional electricity trade to at least 15,000 GWh annually, enough to supply millions of consumers Triple regional transmission capacity to 16 GW Enable up to 9 GW of clean energy integration The initiative is designed to enhance regional energy security, reduce power outages, lower electricity costs, and promote a more resilient and interconnected grid system. Total indicative financing for the program is $1.018 billion, to be deployed in three phases. These funds will support the creation and operation of a regional energy market, boost transmission infrastructure, introduce digital technologies to improve grid reliability, and strengthen regional energy institutions and coordination mechanisms. Investments are also expected to generate both construction-related employment and high-skilled jobs tied to market operations. In the program’s first phase, Kyrgyzstan, Tajikistan, Uzbekistan, and the Central Asian Countries’ Coordinating Dispatch Center (CDC) Energia will benefit from grants and concessional financing totaling $143.2 million. This comprises $140 million from the World Bank’s International Development Association (IDA) and $3.2 million from the Central Asia Water and Energy Program (CAWEP). “The REMIT Program supports Central Asian countries’ ambition to deepen energy cooperation and create a regional electricity market,” said Najy Benhassine, World Bank Regional Director for Central Asia. “This will enable more efficient use of energy resources, including cross-border deployment of clean energy, improve access to reliable and affordable electricity, and support jobs. By 2050, stronger regional connectivity could generate up to $15 billion in economic benefits.” Charles Cormier, World Bank Regional Infrastructure Director for Europe and Central Asia, added that REMIT will advance energy security and unlock private sector investment. “The first phase alone is expected to enable about 900 MW of new clean energy capacity, leveraging $700 million in private investment. This will pave the way for a more resilient and interconnected power system across this dynamic region,” he said. CDC Energia will lead the implementation of market and institutional activities, while national transmission companies will be responsible for infrastructure investments.

Northern Aral Sea Rescue Project

Astana Accelerates Northern Aral Sea Recovery Plan

The Kazakh government plans to accelerate the second phase of the project to restore the Northern Aral Sea. Prime Minister Olzhas Bektenov has instructed the Ministry of Water Resources and Irrigation to secure financing for the second phase of the project by the end of 2026. The goal is to increase the volume of water in the Northern Aral Sea by around 10–11 billion cubic meters over the next four to five years. History of Degradation and Early Restoration Results The Aral Sea, which straddles the border between Kazakhstan and Uzbekistan, began to shrink rapidly in the 1960s due to large-scale irrigation projects that diverted water from the Amu Darya and Syr Darya rivers for cotton cultivation and other agricultural needs. As a result of the sea’s degradation, the Northern Aral Sea separated in 1987 and has since been sustained largely through the construction of the Kokaral Dam. In 2012, the sea and the Syr Darya delta were added to the Ramsar List of Wetlands of International Importance. Since then, Kazakhstan has undertaken systematic efforts to restore the northern part of the former Aral Sea. Unlike earlier efforts to save the Aral Sea as a whole, Kazakhstan’s approach since the mid-2000s has been shaped by a narrower and more pragmatic premise: that partial restoration is environmentally and politically achievable, while attempts to revive the entire basin are not. The construction of the Kokaral Dam marked a turning point, demonstrating that targeted hydraulic interventions could stabilise water levels, reduce salinity, and revive fisheries in the northern basin, provided expectations were kept within achievable limits. The recovery has already enabled the return of small-scale fishing, improved local livelihoods, and reduced dust storms from the exposed seabed around Aralsk. This strategy reflected a deliberate acceptance that restoring the Northern Aral would come at the expense of the southern basin, prioritising long-term ecological viability over symbolic ambitions. Over the past several years, roughly 5 billion cubic meters of water have been redirected into the Northern Aral Sea basin, increasing its total volume to more than 23 billion cubic meters. This exceeds the targets set out in Kazakhstan's Water Resources Management Concept, which had forecast reaching 20.6 billion cubic meters by 2025, with that volume previously expected only by 2029. [caption id="attachment_24691" align="aligncenter" width="2560"] Tastubek Bay, Northern Aral Sea; image: TCA, Stephen M. Bland[/caption] Infrastructure Plans and International Support With the support of the World Bank, Kazakhstan is considering raising the height of the Kokaral Dam by up to two meters and constructing a new hydraulic facility. These upgrades aim to increase both the volume and quality of water in the Northern Aral Sea, rehabilitate the Syr Darya delta, and reduce salt dispersion from the exposed seabed. The second phase of the initiative targets increasing the sea’s volume to 34 billion cubic meters. Bektenov has directed the Ministry of Water Resources and Irrigation to finalize technical preparations by mid-2026 and secure financing by the end of the year, including through international partnerships. The second phase...

Education reform

World Bank Approves $250 Million Loan to Expand Student Financing in Uzbekistan

The World Bank has approved a $250 million loan to support Uzbekistan’s ambitious reform of its student financing system, the institution announced on December 11. The funding will back the Edulmkon Program, a three-year initiative aimed at expanding equitable access to higher and vocational education across the country. Scheduled for implementation between 2026 and 2028, the program is expected to benefit approximately 600,000 young people. Roughly 80% of the loan will be allocated to tuition loans for students from low-income families and for women, groups that continue to face significant barriers to accessing higher education. Uzbekistan, home to around 10 million people aged 14 to 30, has made educational reform a national priority in recent years. This push has led to a surge in the number of universities and vocational institutions, as well as a dramatic rise in enrollment. Between 2017 and 2024, youth participation in higher education increased from 8% to 48%. However, the rapid expansion has exposed weaknesses in the country’s student loan system, which is based on state subsidized loans issued through commercial banks. The World Bank has noted that the current model is not well aligned with labor market needs, as loans are not directed toward high demand fields such as science, technology, engineering, and mathematics (STEM), as well as information and communication technology (ICT). This misalignment has contributed to graduate underemployment, while gender disparities persist. Although women represent more than half of all university students and are the primary recipients of tuition loans, only one-third of female students are enrolled in STEM disciplines. The Edulmkon Program, to be led by the Ministry of Economy and Finance, will address these challenges through a series of reforms. These include modernizing tuition loan management, improving inter-agency coordination, and launching a centralized digital platform to streamline loan processing and improve transparency. The program will also revise eligibility and subsidy criteria to better serve vulnerable students. A cornerstone of the reform is the introduction of an income-contingent loan system, where repayments are based on a graduate’s income. This approach is designed to protect low-income borrowers and those facing temporary unemployment after graduation. By the end of 2028, students are expected to access loans through 12 participating commercial banks operating in coordination with the Ministry. The World Bank also noted that the program aims to attract approximately $30 million in private capital, reducing fiscal pressure on the state while expanding access to education financing.